As the price level rises, the cost of borrowing money will causing the quantity of output demanded to . This phenomenon is known as the effect. Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will Net exports will therefore causing the quantity of domestic output demanded to This phenomenon is known as the effect.
As the price level rises, the cost of borrowing money will causing the quantity of output demanded to . This phenomenon is known as the effect. Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firms (imports) will Net exports will therefore causing the quantity of domestic output demanded to This phenomenon is known as the effect.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Hi please answer these fill in blanks according to the graph, thank you.
Transcribed Image Text:As the price level rises, the cost of borrowing money will
, causing the quantity of output demanded to
This phenomenon is known as the
effect.
Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to
in foreign exchange
markets. The number of domestic products purchased by foreigners (exports) will therefore
and the number of foreign
products purchased by domestic consumers and firms (imports) will
. Net exports will therefore
causing the quantity of domestic output demanded to
This phenomenon is known as the
effect.
Transcribed Image Text:3. Why the aggregate demand curve slopes downward
The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output
demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of
output demanded falls to $300 billion.
170
160
150
B
140
130
A
120
110
AD
100
90
100
200
300
400
500
600
700
800
OUTPUT (Billions of dollars)
PRICE LEVEL
శ్రీక్రి
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